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GAO Urges CMS to Streamline Improper Payment Review Process

Today, Citizens Against Government Waste (CAGW) reacted to a July, 2014
Government Accountability Office (GAO) report
on the confusion and inefficiencies related to how the Centers for
Medicare and Medicaid Services (CMS) manages its post-payment review
auditors. The report was requested by a bipartisan group of lawmakers
from the Senate and House of Representatives. The Medicare
fee-for-service (FFS) program is plagued with the highest percentage of
improper payments in the federal government, totaling $36.6 billion in
fiscal year (FY) 2013.

In order to reduce improper payments, CMS relies on a patchwork of
post-payment review contractors to identify improper payments. The
56-page GAO report evaluated the post-payment review regime and found
that oversight and management of its contractors is flawed, hampered by
split accountability, incomplete data, and inadequate communication,
both between CMS and the contractors, as well as among the contractors
themselves. In addition, legislativ language, as well as CMS's own
internal rule and regulations, are often conflicting and contradictory.

Only one type of post-payment claims auditor, Recovery Auditing
Contractors (RACs), is authorized to recover improper overpayments on
behalf of the fiscally-challenged Medicare Trust Fund. RACs perform the
vast majority of post-payment reviews; in 2012, RACs performed 1.1
million claims reviews, 83 percent of the claims reviewed that year.
RACs have recovered $8 billion for taxpayers since 2009.

"CMS's post-payment review process would look familiar to Franz Kafka,"
said CAGW Vice President for Policy and Communications Leslie Paige.
"Much needs to be done to streamline that process and resolve
inconsistencies. However, in so doing, CAGW urges the CMS not to
undermine the successful RAC program. RACs consistently score very high
marks when it comes to compliance with CMS rules, their contractual
obligations, correspondence with providers, as well as
independently-verified quality assurance evaluations, all while
recovering billions in improper payments from hospitals that have been
overbilling taxpayers."

In FY 2013, improper payments for Medicare FFS jumped to 10.1 percent,
up from 8.3 percent in FY 2012. Yet, in February 2014, under intense
pressure from hospitals, CMS suspended RAC audits until March 31, 2015.
Though CMS announced a return to limited RAC audits on August 4, 2014
the program has not been authorized to audit the area of hospital claims
it had been reviewing prior to the suspension.

"Even as improper payment rates are rising, CMS is effectively benching
its most effective player in the campaign against Medicare improper
payments," said Leslie Paige. "The GAO report points to specific,
correctable weaknesses in CMS management of its post-payment review
auditors. We urge CMS to enact the GAO's recommendations, and also get
the RACs fully back to work on behalf of taxpayers."

Citizens
Against Government Waste is the lobbying arm of Citizens Against
Government Waste, the nation's largest nonpartisan, nonprofit
organization dedicated to eliminating waste, fraud, abuse, and
mismanagement in government.